Online car loan brokers

A car loan broker can find you a lender and help you apply for a car loan, saving you both time and money. They can also lend you some expertise if you’re new to getting an auto loan. But you should still do your research to make sure you’re working with someone you trust.

How do car loan brokers differ from a direct lender?

There are a few key differences between a car loan broker and a car lender. The car lender, such as a bank or standalone financier, is able to provide car finance directly through their branches. A car loan broker goes between banks and car lenders to find a loan that will meet your needs.

A lender can only offer you the products that it has whereas a car loan broker is able to pick and choose the loans it’s able to suggest. Car loan brokers sift through the lenders for you instead of you having to go to multiple lenders to get quotes.

What are the benefits of using car loan brokers?

There are a variety of benefits that come with using a car loan broker.

• Access a range of lenders. If you don’t have a lot of time to look around but still want the best deal available for your car, a car loan broker is able to engage with a variety of lenders and different institutions in order to get you what you need.
• Convenience. There are many institutions competing for your business at the same time instead of you individually meeting with one lender at a time.
• Save your credit file. Rather than applying with more than one lender, which will damage your credit score, working with a broker essentially lets you apply with multiple lenders through one application.

How do I choose an online car loan broker?

It can be tough choosing a car loan broker, but it’s important to consider whether or not they meet your needs.

The most important thing to know is to make sure that your broker is acting within the law by having a provincial license if it’s required. Check with your province’s department/ministry tasked with regulating vehicle sales. Below is a list of such organizations:

Also keep in mind that a car loan broker should be transparent with its fees. It is important to ask what loans a broker offers, who it works with and if it charges a fee for its services.

Getting all the right information is vital in making your decision, so it’s okay to ask questions before agreeing to go with a car loan broker. Making a wish list of your loan requirements can also help as you can show the loan broker what you’re looking for.

Are there any risks in using an online car loan broker?

There are a few risks to using an online broker. For example, you may not be approved for a loan despite following the broker’s instructions and filling out the form properly. This can be tough as you have done the legwork and received no reward for it.

There is also the potential risk of being approved for a loan but it’s not the amount that you need. Keep this in mind when you apply.

Another aspect to keep in mind is that the loan the broker is pushing may work out better for the broker than you, whether that is because of a higher commission rate or a higher fee that it charges you. These possibilities are something to keep in mind when deciding whether or not you want to go with a car loan broker.

How do I apply for an auto loan broker online?

There are a few easy steps to completing an application with a car loan broker.

1. Get in touch. Most brokers have contact information or a quote form on their website.
2. Apply. Brokers typically ask questions about your financial situation, the car you’d like to buy and the loan terms you’re seeking. This information will be used to do a preliminary assessment of your options.
3. Wait for the broker to cross check your application. Many online brokers can use algorithms to quickly find quotes on car loans that you can qualify for.
4. Review your options. If you have any questions, you can ask your broker for clarification.
5. Agree to the terms. Discuss the broker’s terms and make sure you are aware of your obligations under the agreement. Find out if and how the agreement permits you to switch brokers if you want to as well as how the broker’s fees are paid. Also verify that you have the right to reject any loan offers you receive. You have a right to take time to understand the “fine print,” so don’t let yourself be pressured into making a hasty agreement. A good broker will make sure you’re comfortable before signing on to anything.
6. Drive away in your new car. Once the broker finds you a lender and you sign the loan documents, the broker then sends funds directly from the lender to the dealership (or whoever is selling you the car). At this point, you can pick up your new vehicle and get driving!

What do I need to apply with a car loan broker?

Here’s what you’ll need to submit as part of your application:

• Driver’s license
• Insurance information
• Proof of income
• Proof of residence
• Other personal information like your credit score

You’ll also have to provide information about the car you’d like to buy and the person or company selling it (if you’ve chosen your vehicle).

The more complete your application, the better your chances of getting it approved. Online brokers work with a variety of lenders, so they’ll help you cast a wide net by highlighting the strongest aspects of your application.

Pros and cons of applying with an auto loan broker

Is there anything I should keep in mind?

Buying a new car is exciting, but there are a few things to keep in mind before signing any binding contracts.

• Be realistic. Besides a house, a car is one of the bigger investments you’ll make. Go for a purchase that’s good value for money and that you can afford to pay off and maintain.
• Thoroughly check the car. Before signing any legal contracts, make sure that the car corresponds with the seller’s description. Check the car’s kilometres, the features advertised and its general condition.
• Don’t settle. You don’t have to sign or agree to anything if you don’t feel comfortable with the broker’s recommendations. Make sure that the broker has a clear idea of what you want and what you’re willing to pay.

Bottom line

When it comes to financing your next car purchase, an online car loan broker can be a great option if you want to avoid filling out multiple applications and waiting to hear back from each individual lender. Make sure to conduct a thorough check on the broker you choose, and don’t forget to compare your other car loan options.

Frequently asked questions

• What if I don’t earn enough to qualify for a car loan?

  Many car loans are secured with an asset, such as the vehicle you’re purchasing or other valuable property. You can use the collateral to lower the total cost of your loan, but if this still isn’t enough, consider finding a cosigner to help with your purchase.

• Can I have my loan approved before I start car shopping?

  After an initial assessment, some online brokers offer conditional pre-approval before submitting your application to lenders. This means the broker believes you’ll qualify for a loan, and you can use this pre-approval to guide your car shopping.

• How do I know I can trust the lender?

  Since you’re not dealing with the lender yourself, it’s a good idea to make sure you’re borrowing from a reputable service. Check to see whether the lender is registered and licensed in your province.

  It also helps to research previous customer’s reviews to see if they match with the lender’s claims. If you have any reason to doubt the legitimacy of a lender, you’re under no obligation to finalize the loan.